NEW YORK, March 6 (UPI) -- Stock prices on the New York Stock Exchange and the Nasdaq Stock Market ended on the downside Thursday, pressured by a weak reading on the nation's labor market.
The blue-chip Dow Jones industrial average, which rose 70.73 points Wednesday, dropped 101.61 points, or 1.31 percent, to close at 7,673.99. The tech-heavy Nasdaq composite index, which added 6.63 points in the previous session, lost 11.48 points, or 0.87 percent, to close at 1,302.92.
The broader New York Stock Exchange composite index dropped 47.73 to close at 4,626.02, the Standard & Poor's 500 index fell 7.75 to 827.02, the American Stock Exchange composite index lost 1.62 points to close at 827.02 and the Wilshire 5000 Index dropped 65.60 points to close at 7,799.65.
Volume was 1.49 billion on the Big Board and 1.23 billion on the Nasdaq Stock Exchange.
Analysts said investors shunned stocks after a report showed more evidence of a deteriorating job market, something that could sap the already-waning economy and hints at bad things for Friday's more comprehensive unemployment report.
Analysts said stocks came under pressure from the opening bell amid new worries over the economy after the Labor Department reported that jobless claims for the week ended March 1 climbed to 430,000 from the prior week's 418,000. Economists had expected to see a decline to 403,000.
The 4-week moving average, which some economists say better reflects the volatile jobs market, also broke the psychological 400,000 mark, rising to 408,750.
Analysts said the report raised the specter that Friday's February employment report, could come in poorly.
Experts said businesses are holding off on hiring until they have a clearer picture of what is happening as far as a possible war with Iraq goes.
Meanwhile, the Commerce Department reported fourth-quarter productivity grew at a revised 0.8 percent, better than the 0.4-percent gain economists expected. Productivity grew at a robust 5.5-percent annual rate in the third quarter of 2002.
The government back on Feb. 6 reported productivity declined at a 0.2-percent annual pace, which was the first since a 0.1-percent drop posted during the April through June quarter of 2001.
The Commerce Department also reported orders to U.S. factories rose more than expected in January, adding to evidence of a turnaround in the struggling manufacturing sector. Factory orders jumped 2.1 percent to $327.11 billion, following a revised 0.3-percent rise in December.
The January factory orders report comes as other recent reports show improvement in manufacturing. The index of manufacturing activity from the Institute for Supply Management remained above the "break-even" point of 50 for the past four consecutive months, according to the latest report issued earlier this week. If the ISM index is above 50 it means the manufacturing sector is growing. However, the February ISM index was 50.5, suggesting the growth rate remains weak.
Economists don't believe the U.S. economy will begin growing more quickly until the situation in Iraq is resolved or becomes clearer. The U.S. economy grew at a tepid 1.4 percent annual rate in the fourth quarter of 2002.
In the latest Iraq developments, war worries continued to pressure the market after Secretary of State Colin Powell said the United States is prepared to act against Iraq even without agreement from the United Nations.
And, London's The Times reported that Britain is putting together an amendment to its and the United States' proposed United Nation's resolution that would give Iraq a final deadline to disarm or face force.
That would mean giving Iraq more time to comply. The U.N. Security Council is deadlocked on Iraq, and the British amendment was seen as an attempt at compromise.
Meanwhile, U.S. Treasury prices drifted lower. The 10-year bond eased 6/32 to 101 27/32. Its yield, which moves in the opposite direction of its price, inched up to 3.65 percent from 3.63 percent late Wednesday.
Analysts said Treasury's were pressured by talk of easing in geopolitical risks, which prompted some profit-taking and unwinds of safe-haven bids following a relentless eight-day rally.
In Europe, stock prices ended lower in moderate trading in London, Frankfurt and Paris. The London International Stock Exchange's blue-chip FTSE-100 index eased 2.0 points to 3,561.5. The German DAX index fell 45.47 points, or 1.8 percent, to 2,452.55 and the French CAC-40 index fell 20.54 points, or 0.8 percent, to 2,634.53.
Analysts said concerns about global economic weakness were highlighted after the European Central Bank cut its key lending rates by a quarter percentage point to 2.50 percent, its lowest level in four years, as a potential war in Iraq threatens to weigh on the euro zone's already faltering economy.
London, which doesn't operate under the ECB's auspices, was an exception. There stocks eased after the Bank of England left rates on hold.
